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Friday, November 22, 2013



An organisation’s design is a function of the objectives which it has to accomplish, the diversity and complexity of the tasks to be performed and the environment in which the organisation operates. Similarly, a marketing organisation's design is a function of the diversity of products, markets and product/market combinations that it is involved with and its environment comprising competition, technology, socio-economic and legal factors, and the marketing objectives. Depending on the combination of these factors and the relative importance of each, of them in achieving the marketing objectives, you can design an organisation which is suited to your specific requirements. 

Designing an Organisation 

Organisation refers to any system, body or group of people, comprising various sub-systems or parts which are inter-related and or inter-dependent on each other. An organisation may be informal or formal. An informal organisation has no specific objective to achieve. A formal organisation has specific objectives to achieve and that is the very reason for the organisation's existence. Objectives may relate to making profit or there may be no consideration of profit whatsoever. Thus, when we refer to an organisation it can mean a firm or company involved in business, a non-business organisation such as university, hospital, a social organisation such as club, charitable trust, or a government agency. Irrespective of the nature of an organisation, the principles involved in its design are the same. These are:  

Specialisation: The division of labour on the basis of which a particular type (or set) of activity is differentiated from another. Jobs are assigned to individuals on the basis of their specialisation. 

Departmentalisation: The integration of differentiated (or specialised) activities. and grouping of individuals into departments, divisions etc.

Standardisation: The existence of procedures and systems, which help integrate the entire organisation.

Formalisation: The extent to which all procedures, systems and policies are written, so that the organisation becomes independent of the person(s) who founded it and acquires a life-span substantially longer than any one individual.

Centralisation: The level at which authority for decision-making is concentrated. It involves designing formal reporting relationships and information systems, leading to hierarchical levels and spans of control.

Evaluation: Providing systems for appraisal and compensation.

Structure: The total configuration or arrangement of individuals, departments, reporting ' relationships, information flows, span of control, all of which give the organisation its specific 'shape'.  

Given these basic principles, you have many kinds of organisation structures to choose from. In making the choice, you must evaluate the alternative structures on the basis of:  

-          facilitating achievement of objectives and accomplishment of tasks,
-          managerial control, and
-          cost  

What is Marketing Organisation

The principles of organisation apply whether you are designing the entire organisation or a department within it. The three most basic functions necessary for any business organisation are finance, production and marketing. Each of these functions is organised separately. Thus, within the organisation structure of the firm you would have distinct organisations for each function.
Broadly speaking, marketing is concerned with all aspects of the product, pricing, promotion and distribution. All sub-functions or activities relating to these four basic dimensions are included in the marketing function. You have to account for these various activities when designing the marketing organisation.

The structure of a marketing organisation can be studied at different levels, such as overall firm level or divisional level or market level.
There are many ways of organising the marketing department. We shall discuss in detail the four basic methods:

Methods other than these four are either their derivatives or combinations.


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